[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                NUCLEAR COOPERATION WITH THE UNITED ARAB 
                    EMIRATES: REVIEW OF THE PROPOSED 
                           U.S.-UAE AGREEMENT 

=======================================================================


                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 8, 2009

                               __________

                           Serial No. 111-27

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

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                      COMMITTEE ON FOREIGN AFFAIRS

                 HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
    Samoa                            DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
BRAD SHERMAN, California             DANA ROHRABACHER, California
ROBERT WEXLER, Florida               DONALD A. MANZULLO, Illinois
ELIOT L. ENGEL, New York             EDWARD R. ROYCE, California
BILL DELAHUNT, Massachusetts         RON PAUL, Texas
GREGORY W. MEEKS, New York           JEFF FLAKE, Arizona
DIANE E. WATSON, California          MIKE PENCE, Indiana
RUSS CARNAHAN, Missouri              JOE WILSON, South Carolina
ALBIO SIRES, New Jersey              JOHN BOOZMAN, Arkansas
GERALD E. CONNOLLY, Virginia         J. GRESHAM BARRETT, South Carolina
MICHAEL E. McMAHON, New York         CONNIE MACK, Florida
JOHN S. TANNER, Tennessee            JEFF FORTENBERRY, Nebraska
GENE GREEN, Texas                    MICHAEL T. McCAUL, Texas
LYNN WOOLSEY, California             TED POE, Texas
SHEILA JACKSON LEE, Texas            BOB INGLIS, South Carolina
BARBARA LEE, California              GUS BILIRAKIS, Florida
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
                   Richard J. Kessler, Staff Director
           Yleem Poblete, Republican Staff Director
            David S. Abramowitz, Chief Counsel 
           Kristin Wells, Deputy Chief Counsel 
          Alan Makovsky, Senior Professional Staff Member 
         David Fite, Senior Professional Staff Member
   Pearl Alice Marsh, Senior Professional Staff Member 
     David Killion, Senior Professional Staff Member 
      Hans Hogrefe, Senior Professional Staff Member 
        Manpreet Anand, Professional Staff Member 
     Robin Roizman, Professional Staff Member/Counsel 
        James Ritchotte, Professional Staff Member 
         Michael Beard, Professional Staff Member 
          Cobb Mixter, Professional Staff Member 
         Amanda Sloat, Professional Staff Member 
         Peter Quilter, Professional Staff Member 
                Daniel Silverberg, Counsel 
     Brent Woolfork, Junior Professional Staff Member 
    Shanna Winters, Senior Policy Advisor and Counsel 
      Laura Rush, Professional Staff Member/Security Officer deg.
        Genell Brown, Senior Staff Associate/Hearing Coordinator



















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Ellen O. Tauscher, Under Secretary for Arms Control 
  and International Security, U.S. Department of State...........    17

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable James McGovern, a Representative in Congress from 
  the State of Massachusetts: Prepared statement.................    12
The Honorable Ed Markey, a Representative in Congress from the 
  State of Massachusetts: Prepared statement.....................    14
The Honorable Ellen O. Tauscher: Prepared statement..............    20

                                APPENDIX

Hearing notice...................................................    54
Hearing minutes..................................................    55
Written responses from the Honorable Ellen O. Tauscher to 
  questions submitted for the record by:
  The Honorable Gerald E. Connolly, a Representative in Congress 
    from the State of Virginia...................................    57
  The Honorable Michael E. McMahon, a Representative in Congress 
    from the State of New York...................................    60
  The Honorable Barbara Lee, a Representative in Congress from 
    the State of California......................................    62
  The Honorable Russ Carnahan, a Representative in Congress from 
    the State of Missouri........................................    68
The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Chairman, Committee on Foreign 
  Affairs: Prepared statement....................................    70
The Honorable Dan Burton, a Representative in Congress from the 
  State of Indiana: Prepared statement...........................    74
The Honorable Gerald E. Connolly: Prepared statement.............    75
The Honorable Michael E. McMahon: Prepared statement.............    77
The Honorable Gene Green, a Representative in Congress from the 
  State of Texas: Prepared statement.............................    79
The Honorable Diane E. Watson, a Representative in Congress from 
  the State of California: Prepared statement....................    80


   NUCLEAR COOPERATION WITH THE UNITED ARAB EMIRATES: REVIEW OF THE 
                      PROPOSED U.S.-UAE AGREEMENT

                              ----------                              


                        WEDNESDAY, JULY 8, 2009

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m., in 
room 2172, Rayburn House Office Building, Hon. Howard L. Berman 
(chairman of the committee) presiding.
    Chairman Berman. The committee will come to order.
    The purpose of today's hearing is to examine the proposed 
``Agreement for Cooperation between the Government of the 
United States of America and the Government of the United Arab 
Emirates Concerning Peaceful Uses of Nuclear Energy,'' and the 
whole variety of issues that are associated with that proposed 
agreement.
    This marks the first appearance before Congress by the new 
Under Secretary of State for Arms Control and International 
Security, our former House colleague, our dear friend, 
California Representative Ellen Tauscher.
    Madam Under Secretary, congratulations from the entire 
committee on your new appointment----
    Ms. Tauscher. Thank you.
    Chairman Berman [continuing]. And on your wedding. Two vows 
on the same day. This is a wonderful place to take a honeymoon.
    And, in addition, our congratulations to you and our real 
joy at the fact that, number one, you are doing this very 
important job, and secondly, that there is life for former 
Members of Congress, I think we all want to offer--at least I 
want to offer my congratulations to the Obama administration on 
the framework for a new nuclear arms reduction treaty to 
replace the 1991 Strategic Arms Reduction Treaty (START), which 
expires in December. As was made clear in our hearing that we 
had 2 weeks ago, it is absolutely vital to our national 
security to preserve the gains of the START treaty and to 
further reduce the United States and Russian nuclear arsenals. 
There is no question but that there is a clear linkage between 
our nuclear nonproliferation and arms control policies, and we 
ignore that linkage at our peril.
    On to the UAE agreement: Under U.S. law, a civilian nuclear 
cooperation agreement is required before we can transfer 
significant nuclear equipment and materials to a foreign 
nation. Often referred to as a ``123 agreement'' after section 
123 of the Atomic Energy Act, it provides the legal framework 
for the U.S. companies to export controlled civil nuclear 
goods.
    By itself, a 123 agreement transfers nothing; all U.S. 
nuclear sales and exports must go through their own licensing 
review and approvals before they leave our shores. If a 
proposed agreement complies with all the requirements of 
section 123--as this one does--then it can be brought into 
force by the President, unless Congress enacts a joint 
resolution of disapproval within 90 days of continuous 
legislative session following its submission. Based on our 
mathematical geniuses' calculations, and assumptions regarding 
the legislative schedules, the review period for the UAE 
agreement will end on October 17th.
    This is the first proposed United States nuclear 
cooperation agreement with a Persian Gulf state. As such, it 
inevitably raises questions about the broader implications of 
civil nuclear power in that volatile region, home to a number 
of terrorist groups and an Iran seemingly determined to acquire 
a nuclear weapons capability. There are those, both inside and 
outside Congress, who would clearly prefer that the region stay 
nuclear free, not just of weapons, but also of reactors and 
related facilities.
    I share their concerns. But there are multiple suppliers of 
civil nuclear power reactors in the world today. Both France 
and South Korea have already concluded similar cooperation 
agreements with the Emirates. Moreover, many of the Gulf 
states, the UAE included, have ample financial means to buy 
from whomever they choose, under whatever terms those vendors 
are willing to offer.
    It is unlikely that the United States would be able to 
bring sufficient diplomatic pressure to bear against France, 
Russia, Canada, South Korea and all the others that could do 
this to convince them not to sell civil nuclear equipment or 
fuel to the UAE and other Gulf states, all of which are parties 
to the Nonproliferation Treaty, or NPT.
    That is the context in which we consider this agreement.
    Some express concerns that 123 agreements encourage or 
enable the proliferation of nuclear weapons, as civilian 
reactors and some of their associated facilities can also 
produce material for a nuclear bomb if diverted from peaceful 
use.
    In that context, it is important to note that the 
nonproliferation conditions of the proposed U.S.-UAE Agreement 
go beyond those required by the NPT, beyond those of the 
Nuclear Suppliers Group, and beyond those of even our own laws.
    It contains, for the first time in any U.S. nuclear 
cooperation agreement, a binding legal commitment by the 
foreign recipient not to engage in any uranium enrichment or 
spent-fuel reprocessing activities, nor to have any facilities 
for such activities. If the UAE violates this provision, then 
the U.S. would have the legal right to terminate the agreement, 
prohibit all current and future transfers to the UAE, and 
demand the return of all equipment, material, and facilities 
previously provided. This is the same so-called ``take-back'' 
right that is normally reserved as a penalty for a nuclear test 
or a major violation of an IAEA safeguards agreement.
    I believe any future U.S. 123 agreement in the region--with 
Jordan, Kuwait, and other states that are seeking it--should 
follow this model. Indeed, this model could even be applied if 
one day Iran truly changes from pursuing a nuclear weapons 
capability to a country whose deeds match its own words in 
terms of its desire for nuclear energy.
    Other supplier states will hopefully follow our lead and 
include the no-enrichment/no-reprocessing obligation in their 
own nuclear cooperation agreements.
    For me, the fundamental issue is not the substance of the 
agreement itself. It is, I believe, the best one we have 
entered into. Rather, it is the extent to which the UAE has 
been a reliable partner of the United States in working to 
prevent Iran's efforts to develop a nuclear weapons capability.
    For many years, Iran has sought to use the UAE as a transit 
point to illicitly procure items to support its nuclear and 
other WMD programs; expand its conventional military programs; 
and even to acquire electronics to incorporate into Improvised 
Explosives Devices (IEDs) which have killed and maimed the 
United States, Coalition, and Iraqi soldiers and civilians in 
Iraq. Iranian-affiliated banks continue to operate in Dubai, 
several of which have been sanctioned under U.S. antiterrorism 
laws as recently as last May.
    By all accounts, the UAE has significantly improved its 
performance in preventing illicit shipments of military-
sensitive goods to Iran over the past 2 years. Yet, questions 
remain about the extent of the UAE's commitment, as well as the 
pace at which it improves its export control capabilities. For 
example, why is the UAE moving so slowly to implement the 
comprehensive export control law it passed last year?
    The Obama administration notes that the UAE considers Iran 
to be both its most significant security threat, but also an 
important trading partner with which it cannot cut ties. So how 
will the UAE strike a balance between not antagonizing Iran and 
supporting United States efforts to constrain the development 
of Iran's nuclear weapons capabilities? How much leverage does 
this agreement give the United States to help persuade the UAE 
in this area? And do we have more leverage before or after this 
nuclear cooperation agreement goes into force?
    In closing, let me note that the committee held a 
classified briefing 2 weeks ago on some of these issues. And 
earlier, the committee, I believe, and I know I, myself, have 
received a number of different briefings on these issues that I 
have just raised. I know we can't get into classified 
information in this open hearing, but to the greatest extent 
possible, I hope we can use this as an opportunity to address 
some of the critical questions about this important nuclear 
cooperation agreement.
    And I now turn to the ranking member, my friend from 
Florida, Ms. Ros-Lehtinen, for any remarks she may wish to 
make.
    Ms. Ros-Lehtinen. Thank you so much, always, Mr. Chairman.
    Madam Under Secretary, let me thank you for taking the time 
from your schedule to testify before our committee so soon 
after your confirmation. Thank you so much. And let me also 
express my sincere congratulations on your very recent 
marriage.
    My colleagues and I already lament your departure from the 
House, and we will miss your invaluable expertise and 
bipartisan approach to what are so often very difficult 
subjects of great importance to our country. And most 
importantly of all, we miss your friendship on a daily basis.
    So you may have a high-fallutin' title now, but you will 
always be Ellen to us.
    Ms. Tauscher. Thank you.
    Ms. Ros-Lehtinen. Let me begin my remarks Mr. Chairman, and 
Madam Under Secretary, by stating my strong support for 
stronger ties between the United States and the United Arab 
Emirates.
    In recent years, U.S.-UAE political, economic, and security 
ties have significantly expanded. The UAE is becoming an 
important partner in the Persian Gulf, and I support expanding 
that relationship. I say this to put in context my concerns 
about moving this proposed nuclear cooperation agreement at 
this time.
    For many years, the UAE has been the principal conduit of 
goods and materials intended for Iran's nuclear program, as 
well as for its ballistic missiles and advanced conventional 
weapons systems. In addition, banks and other enterprises in 
the UAE have facilitated Iran's acquisition of these items and 
its support of violent Islamic extremist organizations such as 
Hezbollah.
    The Government of the UAE turned a blind eye to this trade 
for many years, even after U.N. Security Council sanctions were 
imposed on Iran. These and other transactions were also subject 
to U.S. sanctions that were ignored, a fact that we must 
remember in our consideration of this nuclear cooperation 
agreement.
    Similarly, al-Qaeda and other groups freely utilized UAE-
based financial networks to facilitate their anti-U.S. efforts 
by taking full advantage of the absence of effective anti-
money/laundering laws and of the cooperation of UAE citizens 
and others eager to profit from these activities.
    To its credit, the UAE has taken steps in the last 2 years 
to fight money laundering and terrorist financing. It has 
participated in exercises of the Proliferation Security 
Initiative (PSI) and it has adopted a number of laws and 
regulations to strengthen its export controls.
    Many of us have supported a number of other U.S. efforts to 
acknowledge this progress and encouraged the UAE to continue. 
However, a nuclear cooperation agreement at this point, with 
just 2 years as a reference, is one line that some of us are 
not prepared to cross.
    Despite repeated claims by officials in this 
administration, and last year by the Bush administration that 
the necessary laws and regulations are already in force in the 
UAE, the truth is that they are still incomplete. I reference 
two letters that I had written to President Bush about these 
concerns and letters to President Obama about these concerns. I 
am an equal opportunity, bipartisan worrier.
    Why? Because these regulations have yet to be fully 
implemented. Sufficient personnel have not been hired and 
trained. A range of other measures are waiting to be put into 
effect. Specifically on the nuclear front, some nuclear laws 
and regulations are yet to be fully implemented.
    But even if all the promised reforms were already in place, 
there simply is no track record to determine if they are, in 
fact, adequate to the task, particularly in light of the UAE's 
long history of complicity or negligence regarding trade with 
Iran and other countries of concern. For this reason, along 
with my colleagues Mr. Royce, Mr. Sherman, Mr. Markey, Mr. 
Fortenberry, Mr. Burton, Mr. Boozman, and Mr. Wilson, I have 
introduced a bill, H.R. 364, to require the President to 
certify that the UAE has met a number of conditions before this 
nuclear cooperation agreement can go into effect.
    The conditions include the UAE's full compliance with 
international sanctions against Iran. Also its crackdown on the 
use of its territory by its own or foreign individuals and 
enterprises engaged in illicit trade with Iran or assisting 
Tehran's financing of terrorist groups such as Hezbollah. And 
thirdly, the application of all United States laws and 
Executive orders regarding trade with Iran.
    These are hardly onerous conditions. Nevertheless, both 
administrations, Bush and Obama, and the UAE argue against 
requiring these standards because they say that the UAE has 
already met them. If this is, in fact, the case, why is the 
administration opposed to this legislation?
    My colleagues and I have written a letter to Secretary 
Clinton on the conditions in the bill. Under Secretary 
Tauscher, thank you for accepting my hand delivery of that 
letter, and I ask your assistance in ensuring that it reaches 
the Secretary.
    This agreement with the UAE also has consequences going 
beyond the UAE itself--specifically, its potential to undermine 
nonproliferation efforts. As we are aware, there is no sharp 
dividing line between the facilities, materials, technology, 
and expertise used for peaceful purposes, such as generating 
electricity and those used in nuclear weapons or weapons 
programs. Iran and North Korea, among others, have demonstrated 
that the inspections and controls that we rely on to prevent 
this diversion have too many holes to provide the degree of 
protection needed to stop this deadly threat. And yet the Obama 
administration, as the Bush administration did, is set on using 
the UAE agreement as a template for new agreements with other 
countries in the Middle East, the most volatile region in the 
word.
    The nuclearization of the Middle East by the United States 
and other countries, such as France and Russia, is an extremely 
dangerous development. How can this be reconciled with stated 
commitments to prevent the proliferation of such deadly 
unconventional weapons?
    I have a number of other concerns regarding this agreement 
which I look forward to discussing with you, Madam Under 
Secretary, following your testimony.
    Thank you so much, Mr. Chairman.
    Welcome, Ellen. Thank you so much.
    Thank you, Howard.
    Chairman Berman. Thank you. And I am now pleased to 
recognize for 3 minutes for an opening statement the chairman 
of the Subcommittee on Middle East and South Asia, the 
gentleman from New York, Mr. Ackerman.
    Mr. Ackerman. Thank you very much, Mr. Chairman. Double 
congratulations to our former colleague.
    Ms. Tauscher. Thank you.
    Mr. Ackerman. It seems like we have almost just begun to 
miss you, and find you here with us again. I want to thank you 
for making this your first stop and working with us from your 
new, very important vantage point.
    I am trying to work through this whole notion of this 123 
agreement with the UAE. I know the agreement is one that is 
very well written, supported by this and the previous 
administration. But I have a broader contextual concern, in 
specific, the region in which this agreement takes place.
    My general concern is, what are the implications, the 
broader implications of a 123 agreement; and does it set off a 
nuclear energy reaction within the region--especially a region 
where opening any Pandora's box is generally a dangerous thing 
to do, because it is more of a ``tinderboxical'' region than 
any place else in the world. And what this does to other 
countries who would like to see this kind of agreement, perhaps 
some with a more jaundiced eye of what it could lead to if they 
have more demonical ambitions for something else down the road.
    I know some might argue that this might not be the ideal 
country to do this in first. Some might argue otherwise. It is 
a country that appears to have a great deal of energy 
resources, both gas and oil. It is one of those few places, I 
guess, where they dig for oil and pray that they hit water. But 
they do have other greater needs.
    So those are the concerns that I have. What does this do in 
the thinking of places like countries that are friendly to us, 
but are troublesome in where they are politically, Egypt and 
others, and every other country in the region?
    So I look forward, with great anxiety, to hear your point 
of view and your explanation.
    Ms. Tauscher. Thank you.
    Mr. Ackerman. Thank you and welcome.
    Ms. Tauscher. Thank you very much.
    Chairman Berman. You will calm him down.
    Ms. Tauscher. I will try.
    Chairman Berman. I am pleased to recognize the ranking 
member of that Subcommittee on the Middle East and South Asia, 
the distinguished gentleman from Indiana, Mr. Burton, for 3 
minutes.
    Mr. Burton. You sure look happy. I don't know whether it is 
from getting married or becoming an official at the State 
Department. You want to tell us which one?
    Never mind. We will talk about that off the record.
    I am not going to be redundant and go into the things that 
have already been covered by the chairman and ranking member 
and Mr. Ackerman. But I would just like to make a couple of 
real brief comments.
    First of all, I find it interesting that we are helping 
India and the UAE with nuclear energy development programs, and 
we ain't doing it here. We ought to develop a lot of nuclear 
plants here for nuclear energy because it is clean burning, it 
is efficient, and it helps the environment. And so, since we 
are doing those things over there, why don't we take a hard 
look at doing it here in America? France gets about 75 percent 
of their energy from nuclear sources.
    The other thing is the UAE has a long history of 
undermining U.N. Security Council sanctions regarding Tehran's 
weapons program. The UAE has many times overlooked the transfer 
of weapons systems and financial assistance through its ports 
to recipients such as Iran, Hezbollah, and other terrorist 
organizations. And that is something I don't think any of us, 
Democrat or Republican, want to continue.
    I am pleased that they are making some strides with more 
effective export controls and financial controls, but so far 
that doesn't appear to be enough, and that is why I am 
cosponsoring the legislation that the ranking member just 
talked about.
    I wish you well in your new duties, and I look forward to 
having you testify before us many times. And tell your husband 
I think he got a good deal.
    Ms. Tauscher. Thank you very much. Thank you.
    Chairman Berman. I am very pleased to recognize the 
chairman of the Subcommittee on Terrorism, Nonproliferation and 
Trade, the gentleman from California, Mr. Sherman, for an 
opening statement.
    Mr. Sherman. Madam Secretary, about 2 years ago I spent my 
honeymoon with you and our colleagues, and I hope that your 
honeymoon is as delightful as ours was.
    It was a dark day for Congress, and particularly the class 
of 1996, when we learned that you were leaving us. But then a 
light shown for at least those of us who serve on this 
committee, and especially the Nonproliferation Subcommittee, 
when we learned the position you would be taking and that you 
would continue to work with us.
    The text of the agreement that you are here to discuss I 
think is a good one if we just look at the four corners of the 
agreement. First, it contains a binding commitment by the UAE 
to forgo enrichment and reprocessing technology. Second, the 
UAE will implement the additional protocol safeguards. These 
are two elements that should be in every 123 agreement.
    But if you look outside the text of the agreement, there 
are a couple of significant problems. The first relates to 
jobs. The supporters of this agreement say there may be 10,000 
jobs at stake, but no company will enter this industry unless 
they have protection from liability.
    The French and the Russians already do because their major 
entities are part of the government, so they have sovereign 
immunity. And American companies will not actually do any work 
unless there is something similar adopted at the UAE to the 
Convention on Supplementary Compensation for Nuclear Damage 
(CSC). And I hope and expect that that is what UAE will do. I 
would feel better about this agreement if they had already done 
it.
    I also am concerned that, from what I hear, the whole deal 
is wired for the French anyway. And this disturbs me a little 
bit when I realize that both Kuwaiti and Emirati independence 
is a direct result of the actions we took in the Gulf War.
    Finally, and as has been mentioned by the ranking member 
and others, the UAE's record in transshipment and diversion to 
Iran is not something that is acceptable. As your testimony 
states, the 2007 law adopted by the UAE is a strong basis on 
which to build an effective export control system. I agree with 
you. I just think before you give them the agreement, we 
shouldn't just have a strong basis to build an effective export 
control system; we should have that system in place. And the 
UAE has not named an enforcement agency, has not adopted 
regulations, and simply has no basis on which to learn what 
transshipments are taking place. So unless our intelligence 
hands it to them on a silver platter, it is unlikely that the 
present system will generate any enforcement.
    I look forward to seeing how we deal with this.
    Chairman Berman. The time of the gentleman has expired. The 
ranking member of the Subcommittee on Terrorism, and 
deg.Nonproliferation and Trade, the gentleman from California, 
Mr. Royce, is recognized.
    Mr. Royce. Well, thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    And, Madam Secretary, I know you are getting right to work, 
and congratulations on your appointment. I think you certainly 
have your work cut out for you.
    The proliferation challenges that we face are complex. As 
you know, they are very compounding, and that is why it is 
important that we get today's topic, nuclear cooperation with 
the United Arab Emirates, right. And it is even more so when 
the agreement has been talked of as a model which other nations 
across the region might elect to follow after we get this in 
place.
    I know Under Secretary Tauscher will testify that this 
agreement encompasses the highest nonproliferation standards. 
Now, some contend additionally that this agreement will serve 
to isolate Iran's nuclear program; and I think that is a 
debatable conclusion. That the UAE is committed to forgo 
enrichment and reprocessing is a very, very positive 
development; and I think the administration is right to 
emphasize that. Yet, if the White House is considering 
endorsing some sort of enrichment capability under enhanced 
inspections on Iranian soil, as has been reported, I don't 
think that squares. I think that--personally I would hate to be 
the State Department official who has to explain to a Middle 
Eastern country that Iran can run X number of centrifuges while 
they can have none.
    Before this committee in April, Secretary of State Clinton 
testified that the United States is laying the foundation for 
what she explained was crippling sanctions against Iran should 
the administration's engagement fail. I think that is what we 
need to do.
    Given its extensive trade relationship, the UAE would be 
key to any aggressive sanction effort that we might cobble 
together under that approach. And to that end, the United 
States should be working to ensure the UAE's support of such an 
effort.
    Thank you again, Mr. Chairman, for holding this hearing 
today.
    Chairman Berman. The time of the gentleman has expired. I 
thank you.
    And does any other member wish to make a 1-minute opening 
statement?
    The gentlelady from California, Ambassador Watson, is 
recognized for 1 minute.
    Ms. Watson. Thank you so much, Mr. Chairman, for this 
hearing.
    And I also want to add my congratulations. What a day for 
you, the high position that you hold. And the highest was the 
fact that you found a wonderful partner to work with you. And I 
know things will get much better for our side with you there as 
the Under Secretary.
    I want to join with my colleagues with my concerns on the 
123 agreement, which essentially promised United States 
cooperation on civil nuclear power in return for safeguards 
against sensitive technology being diverted to a weapons 
program or other non-NPT countries like Iran. It will remain in 
effect for 30 years.
    However, my continued concern is that though this agreement 
has a cessation of cooperation clause and explicitly prohibits 
the reprocessing and enrichment of uranium and plutonium, it 
does not go far enough to encourage the UAE to fully implement 
its 2007 export control law.
    So I look forward to listening to you, Madam Under 
Secretary, and I request unanimous consent that my full 
statement be added to the record, Mr. Chairman.
    Chairman Berman. Without objection, so ordered.
    Ms. Watson. Thank you. I yield.
    Chairman Berman. Any other?
    Mr. McMahon?
    Mr. McMahon. Thank you, Mr. Chairman. I too will submit, 
with unanimous consent, a longer opening statement to the 
record----
    Chairman Berman. Without objection.
    Mr. McMahon [continuing]. For the record.
    But I too just want to welcome our, very recently, former 
colleague. What a great sense of personal satisfaction to see 
you there, but also for our Nation a great sense of security.
    We look forward to hearing your testimony about this very 
important program and, in particular, ask you to focus in the 
testimony how it is that--given the vast procurement network 
that Iran has with the UAE, how the United States intends to 
guarantee that this technology shared with the UAE does not end 
up benefiting Iran. I think that is, for all of us, the crucial 
point, and a more expanded statement I will submit.
    But let me just express or echo what we all said, what a 
great sense of pleasure and confidence we have in seeing you--a 
little sadness, but confidence as well--seeing you there. And 
congratulations on your marriage as well.
    Thank you, Mr. Chairman. I yield the remainder of my time.
    Chairman Berman. The time of the gentleman has expired.
    The chairman of the Asia, the Pacific and the Global 
Environment Subcommittee, Mr. Faleomavaega, is recognized for 1 
minute.
    Mr. Faleomavaega. Mr. Chairman, thank you. And for the sake 
of time, I too would like to submit the full text of my 
statement to be made part of the record.
    Chairman Berman. Without objection.
    Mr. Faleomavaega. And I want to personally offer my 
personal welcome to the distinguished gentlelady from 
California, now as our Under Secretary. Could not have asked 
for a better person in understanding the importance of this 
issue of disarmament and nonproliferation now facing our 
country, as well as other countries of the world.
    And I look forward in dialoguing with Ms. Tauscher. Thank 
you, Mr. Chairman.
    Chairman Berman. Thank you. The time of the gentleman has 
expired.
    The gentleman from South Carolina, Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman.
    And Madam Secretary, congratulations. From this side of the 
aisle, we are very happy for your success. And I have 
confidence in you as to the issues that we will be facing.
    I also want you to know that I brought the Congressional 
Record from 10 days ago, where you were commended. So we have 
got official recognition----
    Ms. Tauscher. Thank you.
    Mr. Wilson [continuing]. Which I will present to you.
    But like so many other persons have indicated, we have a 
great concern about the ability of Iran, a state supporter of 
terrorism, as to their ability to possibly acquire nuclear 
material. I am very concerned and look forward to hearing your 
testimony as to how we can safeguard our allies in the Persian 
Gulf and also Israel. Thank you.
    Ms. Tauscher. Thank you.
    Chairman Berman. The gentleman from New Jersey, Mr. Sires, 
is recognized for 1 minute.
    Mr. Sires. Thank you, Mr. Chairman. I will just be very 
brief and congratulate you. Everybody back home is very proud 
of you. You know, the people in Harrison and East Newark and 
everybody, there is a special place in their hearts for you. 
And I know that you are going to do well.
    And they are throwing you right into the fire the first 
day. So congratulations, but I know you will do very well.
    Ms. Tauscher. Thank you very much. Thank you.
    Chairman Berman. You are not a native Californian? I 
thought just her parents were from New Jersey.
    The gentlelady from California, Ms. Woolsey, is recognized 
for 1 minute.
    Ms. Woolsey. I have been trying so hard to sit back so that 
Ellen could say her piece.
    Chairman Berman. But we can't.
    Ms. Woolsey. No, but we can't. We have to hear ourselves 
first.
    I want to congratulate you----
    Ms. Tauscher. Thank you.
    Ms. Woolsey [continuing]. On this appointment. It is the 
best fit--and I have told you this before----
    Ms. Tauscher. Thank you.
    Ms. Woolsey [continuing]. Of any appointment I have 
experienced since I have been a Member of Congress. And I look 
forward to going forward and working with you from this point 
on.
    Ms. Tauscher. Thank you.
    Ms. Woolsey. So I am glad you are here.
    Ms. Tauscher. Thank you very much. Thank you.
    Chairman Berman. The gentlelady from California, Ms. Lee.
    Ms. Lee. Thank you very much. Let me say welcome----
    Ms. Tauscher. Thank you, Barbara.
    Ms. Lee [continuing]. Back home again.
    It is remarkable to see you in this position. But as I said 
to you earlier, I feel that we can sleep better at night 
because you are in this position----
    Ms. Tauscher. Thank you, Barbara.
    Ms. Lee [continuing]. And that our children owe you a debt 
of gratitude.
    Ms. Tauscher. Thank you.
    Ms. Lee. People at home--of course, your California home--
are very happy that you are where you are, but we miss you 
tremendously.
    I remember the first day that we met. You were running for 
Congress. It was at the Port of Oakland. There was a rally with 
then-candidate Bill Clinton. And he looked at you and he said, 
``My goodness, you look like a Member of Congress.''
    And I just have to say to you, you look like Madam 
Secretary today. And we appreciate the sacrifices that you are 
making, but also congratulations to you on your marriage and 
good luck.
    Ms. Tauscher. Thank you.
    Ms. Lee. And I look forward to listening to your testimony.
    Chairman Berman. Do any other members seek recognition?
    The gentleman from Florida, Mr. Klein.
    Mr. Klein. Thank you, Mr. Chairman. I am over here.
    Welcome. I am so happy to have you here, and so happy for 
the American people and for Congress to have the level of 
expertise that you have in this role. It is a very important 
time to have the depth of experience. We are all obviously 
concerned and want to make sure we make the right decisions.
    I am very supportive of the positions you have taken in the 
past on proliferation, nonproliferation, and things like that. 
Obviously, we are concerned about Iran. We are also concerned 
about the general Middle East; and whether it is the UAE or 
other places, obviously they could set off a chain of events 
which could be very detrimental to the region and the rest of 
the world. So we want to make sure we get it right.
    I am very confident that you will give us the right 
direction. And we look forward to discussing with you and 
working with you.
    Ms. Tauscher. Thank you very much. Thank you.
    Chairman Berman. Does any other member wish recognition?
    The only thing we are missing here is a bottle of 
champagne, all these toasts.
    I am going to ask unanimous consent from the committee to 
include prepared statements by Mr. McGovern and Mr. Markey, 
both of Massachusetts, in the record of this hearing.
    [The information referred to follows:]McGovern 
statement 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Markey statement 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Berman. And now, Madam Secretary, it is your turn. 
I don't think I need to introduce you, but for the record, 
Secretary Tauscher previously served seven terms, representing 
the 10th District of California. She served on the House Armed 
Services Committee and the Transportation and Infrastructure 
Committee, and chaired the House Armed Services Strategic 
Forces Subcommittee.
    She also chaired the New Democratic Coalition, a group of 
60 centrist Democrats.
    She has been known for many years in the House, as has been 
mentioned by my colleagues, as a tireless advocate for arms 
control and nonproliferation. This is, as Barbara Lee said, the 
perfect fit.
    Madam Secretary, please proceed with your testimony.

 STATEMENT OF THE HONORABLE ELLEN O. TAUSCHER, UNDER SECRETARY 
FOR ARMS CONTROL AND INTERNATIONAL SECURITY, U.S. DEPARTMENT OF 
                             STATE

    Ms. Tauscher. Chairman Berman, Ranking Member Ros-Lehtinen, 
distinguished members of the committee, colleagues, I may not 
be a Member of the House any longer, but I have come back to 
visit my heart. And I look at all of you and want you to know 
that on my third day in office and my third day at work, I took 
the first opportunity I could to come and come before this 
committee, which will be so very important to President Obama 
and Secretary Clinton's agendas. And wanted you to know that I 
came here as fast as I could because the work that I will do 
with you on behalf of the American people is so very, very 
important.
    You have my commitment that I will serve as best I can in 
this new job, as I tried in my old job with you, to provide the 
very best national security for the American people.
    And Ranking Member Ros-Lehtinen, you have my commitment to 
deliver to Secretary Clinton your letter.
    For the members that have spoken, you have touched my 
heart, but you have also made very clear what your concerns 
are. And I want to take this opportunity to testify to make 
sure that you hear from me exactly what the administration's 
position on this situation with the UAE 123 agreement is.
    I look forward to working with you in my capacity as Under 
Secretary of State for Arms Control and International Security. 
As I said, while I may be working in a different part of town, 
I will not be a stranger to this committee; and as we move 
forward to implement President Obama's arms control and 
international security agenda, I will be at the ready to be 
with you and your staff at any time you require it.
    I am here today to testify in support of the proposed U.S.-
UAE Agreement for Peaceful Nuclear Cooperation, which President 
Obama submitted to the Congress on May 21st for review, 
pursuant to section 123 of the Atomic Energy Act of 1954. I 
would like to request that my prepared statement be included in 
the record of today's hearing; I will present a shorter version 
in my oral testimony.
    Mr. Chairman, the proposed agreement under review today 
should be seen in the context of an extraordinary bilateral 
relationship that has developed between the United States and 
the United Arab Emirates in the last several years. The UAE is 
the largest Arab importer of U.S. goods, more than $15 billion 
worth in 2008.
    The United States and the UAE have established an enduring 
partnership and share a common vision for a secure, stable, and 
prosperous Middle East. The UAE provides the United States and 
Coalition forces with access to its ports and territory and 
other critical and important logistical assistance.
    The United States and UAE collaborate as like-minded 
partners on a range of issues facing the region. The UAE is a 
strong supporter of the Palestinian Authority. The UAE was the 
first Arab state to send an ambassador to Baghdad and to 
support Iraq's engagement with its neighbors. It also committed 
to cancel $7 billion in Iraqi debt.
    The United States and the UAE also work closely to bring 
peace and stability to Afghanistan, where the UAE has deployed 
combat troops. The UAE is also working vigorously to support 
Pakistan, pledging $300 million in support of the Tokyo 
Conference in April 2009.
    The UAE has been a responsible and reliable supplier of 
energy to world markets, with sustained involvement of U.S. 
companies in the UAE oil and gas industry for more than 40 
years. The UAE has also made sizable investments in the 
development of renewable energy, and on June 29th, was selected 
to host the headquarters of the International Renewable Energy 
Agency, called IRENA.
    The proposed agreement on peaceful nuclear energy is a 
further strengthening of cooperation between our two countries. 
In addition, the agreement is a significant nonproliferation 
achievement. For the first time, a U.S. partner has voluntarily 
agreed to forgo enrichment and processing.
    The proposed agreement also provides for the first time 
that prior to U.S. licensing of exports of nuclear material, 
equipment, components or technology pursuant to the agreement, 
the UAE shall bring into force the additional protocol to its 
Safeguards Agreement with the IAEA. It also allows the United 
States to require the removal of special fissionable material 
from the UAE and transfer it to either the United States or a 
third country as exceptional circumstances of concern from a 
nonproliferation standpoint so require.
    The UAE's expressed commitment not to pursue enrichment and 
reprocessing capabilities represents a marked contrast to Iran, 
which has failed to comply with its international obligations 
and seeks indigenous nuclear capabilities unnecessary for civil 
nuclear power, but critical for the development of nuclear 
weapons.
    With respect to Iran, I know members have concerns about 
transfers, from or through the UAE, of items to Iran that could 
support its pursuit of weapons of mass destruction, the means 
of their delivery, or terrorism-related activities. It is well 
known that the UAE has been a transshipment hub for sensitive 
items and was used by the A.Q. Khan network for some of its 
activities. In the last several years, however, the UAE has 
taken critical steps to address this problem. It helped the 
United States expose and shut down the Khan network by taking 
actions against firms and financial activities on its 
territory. The UAE has decided at the highest levels not to be 
a source of proliferation in the future.
    While more work remains to be done, the UAE has made 
considerable progress. It is enforcing an export control law. 
It has taken steps to implement United Nations Security Council 
resolutions against North Korea and Iran. It has taken actions 
to prevent the abuse of its financial system by proliferators. 
It has worked closely with the United States to prevent the 
diversion of U.S.-origin goods and technology through its 
territories. It is taking action against companies engaged in 
proliferation-related activities, and it has indicated it has 
stopped shipments of WMD-related goods to countries of concern.
    The United States is committed to working with the UAE on 
further steps toward establishing a comprehensive export 
control regime and effective export control practices. Earlier 
this year, we held our annual Assistant Secretary of State-
level bilateral counterproliferation task force in which we 
discussed additional ways to improve our mutual efforts to 
address proliferation issues. We are assisting the UAE through 
the Department of State Coordinated Export Control and Related 
Border Security Program as well as other U.S. Government 
programs in establishing a comprehensive export control regime 
and effective export control practices.
    We recently completed training UAE prosecutors and judges 
in handling proliferation-related cases, as well as training in 
conducting investigations. Follow-up training is currently 
ongoing. While the UAE still has work to do, we believe it has 
taken the necessary steps to implement an effective export 
control system. As a result, the UAE has become one of our 
strongest nonproliferation partners. It generally shares our 
concern over the proliferation of weapons systems of mass 
destruction, their delivery systems, and related materials, as 
well as WMD financing.
    In closing, Mr. Chairman and ranking member, distinguished 
members of the committee, I would like to ask the committee and 
the Congress to consider the proposed agreement on its own 
merits. It is in some ways a groundbreaking agreement. It 
contains all the necessary nonproliferation conditions and 
controls that Congress has written into law. It does not commit 
either party to transfer any nuclear commodities, technology, 
or services to the other. Those are decisions for the future, 
and will be handled on a case-by-case basis according to usual 
stringent U.S. licensing procedures. As President Obama has 
formally determined, it will promote and not constitute an 
unreasonable risk to the common defense and security of the 
United States.
    By signing this agreement, the United States and the UAE 
have taken an important step in building a long and mutually 
beneficial partnership to enhance nonproliferation and energy 
security in the region. The proposed agreement deserves the 
support of Congress.
    Chairman Berman, Ranking Member Ros-Lehtinen, thank you. 
And I am prepared to answer whatever questions you might have. 
Thank you very much.
    [The prepared statement of Ms. Tauscher 
follows:] Ellen Tauscher 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Berman. Thank you. And I will yield to myself--I 
am just going to ask one question now; at the end I may have a 
couple more.
    But Article 7, as we have talked about, legally binds the 
UAE not to conduct enrichment or reprocessing activities or 
facilities on their sovereign territory. I know the answer to 
this, but I think it is important to get it on the record and 
make sure everyone understands.
    Does that operate regardless of the source of the material 
being enriched or reprocessed? For example, if they import 
uranium from a country other than the U.S., can they perform 
enrichment on that uranium and not be in violation of Article 7 
of the U.S.-UAE Agreement?
    Ms. Tauscher. No, Mr. Chairman.
    Chairman Berman. Now it is on the record.
    I am pleased to yield 5 minutes to the ranking member.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman.
    Thank you for your excellent testimony this morning.
    The administration has said that this agreement ensures 
that the UAE will not pursue enrichment and reprocessing, but 
there are other countries, such as Russia, which are lining up 
to sign their own nuclear cooperation agreements with the UAE. 
France has just done so.
    Are we coordinating our efforts with these countries to 
ensure that a common front is maintained on this very important 
subject? The French agreement does not appear to include a 
binding commitment by the UAE.
    Further, Madam Under Secretary--and you can answer these 
with the time we have remaining--in your testimony you said, 
before submitting the agreement, the President determined that 
it will not constitute an unreasonable risk to the common 
defense and security. How is the U.S. defining or interpreting 
the level of risk, and what constitutes an unreasonable risk?
    Again, your statement further states that the agreement 
states that the U.S. may remove special fissionable material 
subject to the agreement if exceptional circumstances of 
concern from a nonproliferation standpoint so require. Again, 
how do we define ``exceptional circumstances''? At what point 
would that determination be made? When would it be too late to 
prevent a proliferation risk?
    And lastly, reference has continued to be made to the UAE's 
International Atomic Energy Agency Safeguards Agreement of 
2003, yet UAE was still actively facilitating transfers to 
Iran. How can we be certain that the promises made in this 
agreement will be kept and that once they receive the agreement 
they will continue to abide by those commitments?
    Thank you, Madam Secretary.
    Ms. Tauscher. Ranking Member Ros-Lehtinen, there are a 
number of questions, and I will try to summarize them.
    You asked about the other countries that have collateral 
agreements that they are negotiating in and of themselves. And 
the answer is, no, we are not coordinating them, but of course 
we are aware of them. And what satisfies us is that we have the 
strongest agreement.
    And that also leads me to the second question that you 
asked about the President's confidence that this is an 
agreement that will enhance, not diminish our national 
security. I think that what we have to do is step back and take 
a look at the region and understand that there are many other 
players on the field that are negotiating with these countries 
to provide civil nuclear and other kinds of energy-related 
agreements. And what we have done, I think, is to set a very 
high bar.
    Whether that is something that, as the chairman has 
suggested, can be agreed to by other countries is a moot 
question. The issue is that the UAE has agreed voluntarily. 
This is what their terms are. And we think that it is a 
significant achievement not only in civil nuclear, but in 
nonproliferation.
    There are many other players on the field, as I said, that 
are negotiating with countries in the region to provide very 
similar opportunities that the United States is offering. But 
only the United States has this kind of agreement with the UAE 
where we are very, very confident that the proliferation 
concerns that everyone shares are mitigated by the fact that we 
have these no-reprocessing, no-enrichment agreements.
    You asked about the risk to security. I think that by the 
fact that we have this agreement as strong as we believe we 
have it, that the UAE has agreed to--voluntarily agreed to 
sign, says to me that we have a significant opportunity here at 
a time when there is a lot of competition in the region from 
other countries to provide similar services, that we have the 
standard that I think meets the President's standard of 
national security and one that meets the standard of civil 
nuclear cooperation.
    Ms. Ros-Lehtinen. Thank you.
    Ms. Tauscher. You are welcome.
    Chairman Berman. The gentleman from California, Mr. 
Sherman, is recognized for 5 minutes.
    And I might say at the beginning--and I should have--around 
here the 5 minutes is the question and the answers. So 
depending upon the member asking the question, it may leave you 
no time for an answer.
    Ms. Tauscher. Okay.
    Chairman Berman. The gentleman from California.
    Mr. Sherman. We see that Iran is getting most of its 
refined gasoline through UAE terminals at Fujairah and Jebel. 
The UAE is a potential choke point for commerce to Iran. The 
UAE-Iran trade amounts to $12 billion in exports to Iran, 
although much of that is just reexporting what is brought in 
from elsewhere. This might explain the reluctance of UAE 
officials to enact and really enforce robust export control 
that has the potential to impact this trade with Iran.
    Can we use this 123 agreement as leverage to address the 
fact that the UAE is a vital lifeline to the Iranian regime, 
particularly with regard to refined petroleum products?
    Ms. Tauscher. Well, Chairman Sherman, I would think that 
everything is acknowledged in doing this agreement. I think 
that we understand not only the competition in the region, but 
we also understand the special relationship that the UAE has 
with the United States and Iran. And that is this is not a 
risk-reward situation.
    This is what we believe to be a good deal not only for the 
UAE when it comes to civil nuclear cooperation, but this is a 
very key ally for us in the region. We have expanded our 
comments about the export control regime that the UAE has 
recently put in. We are offering a significant amount of 
cooperation with them to make sure that we believe that their 
export control regime is not only robust, but actually has 
prosecutorial and adjudication ability, which is key to making 
sure that, should something be interdicted, there is actually 
follow-through with prosecution and other things.
    So I think that the United States has stepped up to a 
partner, considering that there is competition in the region 
for civil nuclear agreements, and what we have said is, This is 
what our side of the agreement is; we think that this is a very 
good deal for us when it comes to national security and 
nonproliferation concerns. And I think that we believe that the 
UAE is stepping up on their side, providing things like better 
export control regimes and other things.
    Mr. Sherman. But the UAE hasn't even been asked, let alone 
committed to the United States, to interrupt refined petroleum 
exports from those terminals that I outlined. Is that correct?
    Ms. Tauscher. I don't believe the United States is going to 
interfere in the domestic and other issues that the UAE has 
with its trading partners. But certainly we understand what the 
agreement says. And the agreement says that the UAE is meant to 
step up on these other things, including export control regime.
    Mr. Sherman. Okay. Those don't include refined petroleum.
    It concerned me that right after we saved not only Kuwaiti 
independence, but the Emirates' independence in the Gulf War, 
they decided to buy a French phone system. And I commented at 
the time when you dial 911 on a French phone system you get 
Paris, not the Pentagon.
    Now the word seems to be that the French have been assured 
that they will get to build the reactors, while U.S. firms will 
get the crumbs, namely a contract to manage the nuclear 
program. Do you believe that American companies will get 
significant work in the nuclear program? And do you think that 
the French contractor has had an unfair advantage? Because the 
French Government has pretty much indicated that if you want 
that French naval base, you have got to give them the jobs; 
whereas we provide far more security to the Emirates, and I 
don't think we have hinted that getting jobs for Americans will 
have any effect on our foreign policy in the region.
    Ms. Tauscher. I don't believe that there is any quid pro 
quo to other countries' agreements, including basing agreements 
for opportunities to get contracts.
    Once again, as I said in my testimony, all this agreement 
allows is a beginning for the opportunity to have these 
agreements, these contracts. I happen to believe, as I believe 
you do and most members do, that there is a superiority of 
American business competition not only in technology but in the 
American workforce that would support it. I think we can be 
very, very competitive. But we need this agreement in order to 
do that.
    Mr. Sherman. I don't underestimate American technology, but 
I think you underestimate French mercantile policies.
    Ms. Tauscher. That could be true.
    Mr. Sherman. I yield back.
    Chairman Berman. The gentleman from California, Mr. Royce, 
is recognized for 5 minutes.
    Mr. Royce. Thank you, Mr. Chairman.
    And Madam Secretary, if I could raise an issue that I think 
is important to the nonproliferation community--and I think it 
is a logical step that we could take that the IAEA would be in 
support of--they have this ability now with surveillance--what 
do they call it, ``near-real-time'' surveillance of nuclear 
sites. And they have those cameras at many sites around the 
world, and that is one of the ways they do inspections.
    And there would be, of course, the opportunity to do that 
here if we asked the UAE and tried to get their commitment to 
authorize the IAEA to employ those cameras; and so, you know--
Iran has refused, of course, the IAEA request to employ such 
systems. But given the fact that this is going to be a model 
for the region, in contrast to the Iranian behavior, I think it 
would be important to secure a commitment to authorize such 
surveillance as kind of a priority.
    And I don't think there would be a problem doing that. But 
I think, you know, since the UAE has agreed to the additional 
protocol, that needs to happen. And I would just ask you if you 
could sort of honcho and make sure that does happen. Because 
other countries are going to follow suit here, and we want to 
make sure that is teed up.
    Could I have your----
    Ms. Tauscher. Congressman, you have my commitment to work 
with you on this issue. I don't believe that we can reopen the 
agreement and have new requirements in the agreement.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
   Question Asked During the Hearing by the Honorable Edward R. Royce
    The specific safeguards measures that the IAEA will apply at a 
specific site in the UAE will be determined under the procedures 
provided for in the UAE's NPT safeguards agreement. The IAEA has a wide 
array of safeguards measures at its disposal, including remotely 
monitored surveillance; it selects those which are applicable based on 
its technical analysis of the needs of each situation. The IAEA will 
require that the measures applied are effecting in carrying out its 
verification responsibilities. It is premature to determine whether use 
of a real time surveillance camera will be the most effective way of 
meeting safeguards needs at a future UAE facility.

    Mr. Royce. No. I don't think there is a problem here, 
unless we are just trying to make it easy for Iran to cheat.
    I think it is very, very important. There are a lot of 
other countries that are going to follow suit here. I don't 
think this is something that the UAE would have any problem 
with, nor anybody else. There is an agreed additional protocol. 
Unless we are trying to fool ourselves with respect to blinding 
the IAEA with respect to what they monitor in Iran, let's get 
this done.
    Because frankly, between you and me, I don't know that we 
are going to be all that successful with Iran at the end of the 
day. But I sure would like to get this right.
    Ms. Tauscher. Congressman Royce, you have my commitment to 
work with you on this issue. The UAE has agreed to the 
additional protocol. To the extent that everything that is on 
the table they have agreed to, we are there.
    Mr. Royce. You don't have to reopen anything. You can just 
do a side agreement on this. I think it is something that we 
didn't bring up. And I don't know if that is because of lack of 
attention to detail or--or because of the way we are going to 
handle Iran down the road and we didn't want, you know, this 
issue to surface. But it is something that needs to be 
addressed.
    Ms. Tauscher. If you will allow me to work with you on 
this. First of all this is about the UAE. And Iran is a huge 
proliferation concern of ours, but this is about an agreement 
that the Bush administration negotiated a long time ago with 
the UAE. I am reluctant to agree right now that I am going to 
support looking at surveillance as a piece of this. As a side 
agreement, I am not even sure how that could be enforced. What 
I am looking for are things that we could request and that are 
enforceable.
    Mr. Royce. What I am sharing with you is that this is 
something that the IAEA can do, that they have indicated that 
they are in favor of, that the nonproliferation community would 
like to see, that any of us who have worked with this over a 
period of time who don't want to fool ourselves would really 
think would be important, given the fact that this is a model. 
So I don't understand the reluctance. I think there should be 
enthusiasm to work in this regard.
    Ms. Tauscher. I am enthusiastic to work with you. But the 
details of the UAE safeguards were negotiated with the IAEA, 
not the United States. We can weigh in if there is an issue. 
But these side agreements are as you know, rarely enforceable 
and worth what we think they might be. Not a lot.
    You have my commitment. I am a fan of the opportunity have 
as many safeguards a possible. I think the surveillance 
equipment and the monitoring that the IAEA has done and matured 
over the last 5 years are significant and worthy of our 
support.
    If you don't mind, I will provide for the record the 
answers to these issues. But right now the details of the UAE 
safeguards are what they negotiated with the IAEA, not with us, 
so.
    Mr. Royce. Also you mentioned--just in closing--you 
mentioned that the UAE is cooperating with us on Iran. I will 
just quote the Prime Minister. He said last month that Iran's 
nuclear program was peaceful and that Iran's program was an 
internal matter.
    That is probably not the cooperation that you are referring 
to. I am a realist in these things and I think if you are going 
to set a precedent, let's do it right. And thank you very much, 
Madam Secretary.
    Chairman Berman. The gentleman's time has expired. Ms. 
Watson.
    Ms. Watson. Madam Secretary, according to the United Arab 
Emirates officials, their 9 percent growth rate is cited as the 
main justification for the country's need to pursue a nuclear 
program. However the Government of the United Arab Emirates has 
neglected to share the economic costs and energy analysis 
referred to in the briefing. The lack of transparency raises 
some interesting questions. How can we be sure this program is 
necessary without access to the primary source data?
    Ms. Tauscher. Well, Congresswoman, countries, I don't 
believe, need to justify their civilian nuclear desires. I 
think it is very obvious that countries--certainly the United 
States is one of them--want to have a basket of opportunities 
to provide inexpensive, climate-neutral power to their 
citizens. And the UAE has made it clear that they want to have 
a civilian nuclear program only. They have negotiated a very 
tight agreement that precludes any kind of enrichment or things 
that would concern us about nonproliferation. They have done a 
number of different things on export controls. They have, I 
think, worked significantly with us to interdict; concerning 
issues with Iran. And I think that these are domestic decisions 
that the people and the Government of the UAE have made to seek 
this opportunity.
    But once again, all of this agreement does is allow them to 
consider working with us to have this capability. It doesn't 
say that they are going to have the United States contracts or 
that they are going to have, you know, move forward on this. 
All this does is say this is the construct of how you do--the 
framework of how you would do it and then negotiations would 
begin.
    Ms. Watson. Well, as we go into further negotiating and 
dialogue with them, maybe we will ask to see some of the data. 
I think it would be important for us to have that information 
if we can get it. And I am sure that can be handled in a very 
diplomatic way in our interest.
    Ms. Tauscher. We will try to handle that, thank you.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
   Question Asked During the Hearing by the Honorable Diane E. Watson
    We have requested the Government of the UAE to provide further 
details of its analysis.

    Ms. Watson. Another question, the United Arab Emirates 
appeared to be showing an interest in establishing joint 
ventures with the U.S. firms for the design, the construction 
and the operations of a nuclear power plant. However, the 
Government of the Emirates has also reached out to numerous 
other countries including France and the United Kingdom. And so 
the question is will U.S. companies be shown any sort of 
preference with regards to the awarding of contracts, 
specifically relates to the design, the construction and the 
operation of nuclear power plants to the extent possible?
    Ms. Tauscher. Congresswoman, U.S. industry is already 
contributing to the development of nuclear power program in the 
UAE and the Agreement of Cooperation will facilitate its 
further involvement. The U.S. technology in this area is 
leading edge and the United States anticipates that the UAE 
will give it strong consideration as it moves forward in 
implementing its plans to the United States.
    Ms. Watson. Thank you. And one last question. The agreement 
of nuclear cooperation between the Government of the United 
States and the Government of the United Arab Emirates states 
that the UAE shall not engage in the enrichment and 
reprocessing of nuclear material. The agreement goes on to 
outline a list of safeguards to ensure that this does not come 
to fruition, yet the majority of safeguards involve the IAEA.
    And the question is: Are there any direct methods being 
taken by the United States to ensure that the nuclear 
technology does not fall into the hands of Iran and result in 
the creation of a uranium enrichment process? Final question.
    Ms. Tauscher. It is in our security interests to make sure 
that the proliferation of weapons of mass destruction does not 
happen with any of our partners. Clearly with the UAE, we have 
a very strong agreement. It is one that they have negotiated 
voluntarily. It is not something that we have forced on to 
them. But it is about as tight as you can get it. And it really 
precludes any kind of reprocessing or transferring of material. 
And I believe that both the IAEA monitoring of the UAE and U.S. 
agreement is strong. And I believe that the United States' 
commitment and the UAE commitment is equally strong.
    Ms. Watson. Well, in the negotiations, I would hope that we 
could get a firm response from them as to whether or not it 
could get into the hands of the Iranians.
    Ms. Tauscher. Well, it is very clear in the agreement that 
has been negotiated that that is a cause for a breaking of the 
agreement and significant penalties for it.
    Ms. Watson. Thank you so much.
    Ms. Tauscher. You are welcome.
    Mr. Ackerman [presiding]. Mr. Rohrabacher.
    Mr. Rohrabacher. Well, here we are. Let me ask you, first 
of all, state for the record that I believe that working with 
the UAE to demonstrate to other Arab countries, as well as to 
Iran, that we are not opposed to their use of nuclear energy 
for peaceful purposes is a good idea.
    Ms. Tauscher. Thank you.
    Mr. Rohrabacher. The UAE has proven itself in the past. We 
had problems with them in the distant past. But it has proven 
themselves to be very good friends of the United States now and 
we should recognize that and work with them on that friendship. 
And this would be a good way to do that.
    However, we have to make sure that we do that in a way that 
does basically structure the program in a way that it will 
absolutely not help in the development of nuclear weapons.
    Now, with that said, has your agency looked into--I am 
taking it, excuse me, I am taking it that when we talk about 
the long term goal that the plans that are being looked at are 
for light water reactors?
    Ms. Tauscher. Well, first of all, this is just the 
framework agreement that allows the UAE to negotiate with 
United States businesses.
    Mr. Rohrabacher. All right. Conceptually they are the only 
things that are available right now anyway. But let me just 
note, I would like from your agency an analysis of how the high 
temperature gas cooled reactor which is an alternative reactor 
to light water reactors might be used and the benefits that a 
high temperature gas cooled reactor might offer in terms of 
nonproliferation and other benefits when we are trying to 
expand our nuclear program. So if you could get that for me, I 
would appreciate it.
    Ms. Tauscher. I would be happy to get that for you for the 
record. And also, you are correct on the light water reactor 
issue is the scope of what we expect.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
  Question Asked During the Hearing by the Honorable Dana Rohrabacher
    The UAE has stated its commitment to pursuing the highest standards 
of non-proliferation, safeguards and security. We applaud this 
commitment. The UAE believes that advanced third-generation light water 
reactors would best meet its safety goals. The reactor types it has 
under consideration are all either currently deployed or under 
construction in other countries. There is substantial international 
experience in the safe and secure operation of such reactors, and the 
IAEA has extensive experience in safeguarding them. We accept the UAE's 
decision that such reactors can effectively meet its commitments. As to 
the high temperature gas cooled reactor (HTGR), there are no currently 
operating reactors of this type, the IAEA has no experience in 
safeguarding power reactors of this type, and they are not currently 
available in the commercial market.
    We refer you to DOE for a thorough technical analysis of the merits 
of the HTGR. A number of studies have been conducted, and we understand 
it has promising characteristics from the point of view of both safety 
and nonproliferation. We would also like to point out that the UAE has 
stated that it will ``favor and support the development of technologies 
and designs that potentially offer a strong reduction or negation of 
proliferation risks from a technical standpoint.''

    Mr. Rohrabacher. And a high temperature gas cooled reactor 
is a different type of reactor which attributes may well fit 
into the nonproliferation goal, and I would like your analysis 
of that.
    Ms. Tauscher. You will have it for the record, sir.
    Mr. Rohrabacher. Thank you very much. Also, I think that--
well, if I could ask you on another subject, and I know that 
you have asked people questions on other subjects when they 
came before you. There is an effort going on now to ease some 
of the export controls that would permit the United States to 
export our technologies with less restrictions for friendly 
countries. And it is going through this committee. However, one 
exception that we have made in our legislation that has already 
passed through this committee was that we do not believe that 
those export controls should be loosened on the Government of 
Communist China. And we do not believe, for example, that there 
should be any loosening of the prohibition of launching United 
States satellites on Chinese rockets. Do you know if the 
administration has taken a position on that yet?
    Ms. Tauscher. I assume you are talking about the UK-
Australia defense trade agreement?
    Mr. Rohrabacher. No, I'm talking about the export control 
agreement treaty or legislation that has gone through this 
committee.
    Ms. Tauscher. That is right.
    Mr. Rohrabacher. And it is not specifically aimed at that, 
but a general issue. Although we are concerned about Australia 
launching their satellites on Chinese rockets, yes.
    Ms. Tauscher. If I could take that for the record, 
Congressman Rohrabacher, I am happy to. We are reviewing right 
now the export control regimes, and I am happy to take a look 
at this specific issue. I know of your great concern and your 
long-standing----
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
  Question Asked During the Hearing by the Honorable Dana Rohrabacher
    The Administration supports legislation that will provide the 
Executive Branch with flexibility to determine the appropriate type of 
controls for exports of sensitive U.S. dual-use or munitions items and 
technologies. H.R. 2410, Section 826 provides such flexibility for most 
potential foreign sales of U.S. commercial communications satellites 
and related components. The Department plans to consult the Departments 
of Defense and Commerce about the national security and foreign policy 
implications of Section 826, and also with U.S. satellite and related 
component manufacturers on whether Section 826 addresses industry 
concerns that current U.S. export controls place them at a disadvantage 
vis-a-vis their foreign competitors. The Department looks forward to 
working with the Committee on this matter. Whatever the export 
licensing jurisdiction is for commercial communications satellites and 
their related components and technologies, ultimately, the Department's 
goal is to ensure that our export control system strongly protects U.S. 
national security and foreign policy interests.

    Mr. Rohrabacher. The last time we did this, we ended up 
transferring huge amounts of technology to the Chinese. And I 
don't mind taking that risk with countries like Australia and 
friendly countries. But for us--and I think this committee has 
made itself very clear because we voted on this that we are 
interested in loosening those export controls for the benefit 
of business, but not for countries like Communist China and 
obviously North Korea or Iran or any other potentially hostile 
power.
    Ms. Tauscher. I will take that for the record, sir.
    Mr. Rohrabacher. Thank you very much.
    Mr. Ackerman. I thank the gentleman. The chair recognizes 
himself.
    Part of the lesson that we are offering is that in the 
selection of energy, nuclear energy has an appropriate 
alternative, is that we have no objection to countries doing 
that as long as proper safeguards are in place and choosing the 
kind of partners becomes a first priority in that program. I 
think that is an important thing that we are up to. And 
certainly in talking about the Middle East, looking for an 
appropriate partner, the UAE would probably be at the top of 
most people's list.
    Going forward from that, it also seems that the more 
countries that participate in partnering up with us on 123 
agreements that there are as this number bulks up, I would 
think it becomes more and more difficult to start turning 
people down. It just has that dynamic.
    One of the things that you mentioned was that we have a 
tighter agreement than countries which already have agreements 
with the UAE, such as I believe you mentioned Russia and 
France. Are there anything in those agreements that are tougher 
than we have, requirements that we would like to see?
    Ms. Tauscher. I will have to take that for the record 
Chairman Ackerman. I don't really know. I will do some review 
of that. I hesitate to say no, but my sense is that that our 
agreement is far superior and balances the economic development 
wishes of the United States and our companies with the 
necessity to have very, very strong nonproliferation IAEA 
safeguard agreements. So I would say that we have a superior 
agreement, that it is a very, very strong agreement. One that 
the President believes does have the correct balance of first 
and foremost working very strongly against proliferation.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
  Question Asked During the Hearing by the Honorable Gary L. Ackerman
    The UAE does not routinely make bilateral agreements public. We 
have requested a copy of the UAE-France Agreement from the UAE, but 
have not yet received it. It is my understanding that the UAE has not 
signed a nuclear cooperation agreement with Russia.

    Mr. Ackerman. Which would be the next two countries in the 
Middle East, Arab countries, that would seek such an agreement?
    Ms. Tauscher. I really cannot speculate right now. I am 
happy to----
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
  Question Asked During the Hearing by the Honorable Gary L. Ackerman
    The United States proposed a peaceful nuclear cooperation agreement 
to Jordan in December 2007. The Administration has made no decision on 
pursuing negotiation of a nuclear cooperation agreement with any other 
country in the Middle East. Among the States of the Middle East, the 
United States has an existing peaceful nuclear cooperation agreement 
with Egypt.

    Mr. Ackerman. Have any requested it yet do you know?
    Ms. Tauscher. I believe that Jordan has talked to the 
United States. Perhaps Egypt. We have a very good friend in the 
UAE, but we have other friends in the Middle East. And my guess 
is that once this agreement is perhaps is agreed to by the 
United States Congress, I think it is the hope that on a case-
by-case basis----
    Mr. Ackerman. You may open the floodgates?
    Ms. Tauscher. I think you are right. Your analysis in the 
beginning of your question is right on. This is meant to be 
used on a case-by-case basis because of the volatility of the 
region but also because of the fact that you have to balance 
both the economic and the significant nonproliferation 
concerns.
    Mr. Ackerman. Let me make a suggestion. It was a good 
correction we made in law in addressing the credit market when 
we did away with the ability of one company to deny you credit 
in a credit agreement if you defaulted on somebody else's 
credit agreement. You didn't pay your rent, you lost your 
credit card with your bank. It may be in this case a good idea 
to examine an agreement among agreers, such as in the case of 
the UAE, Russia, France and whoever else, ourselves--if and 
when we go through with this--a mutual agreement that a default 
on any agreement which accrues to our benefit, ours being the 
strongest as you pointed out, a breach of anybody's agreement 
would be a breach in all agreements.
    And this would prevent a country--I am not saying the UAE, 
but any country that would have a 123 agreement if we help them 
and sell them that which is necessary to build their nuclear 
energy system, for them turning their back on us and saying we 
don't need you because we have other agreements after 
benefiting from our technology and superior provisions, to then 
say we have other providers with whom we have not, and 
therefore you are too stringent, default on our agreement, and 
still have the backup to done whatever else they might be 
doing.
    Ms. Tauscher. I think that is a very good idea, 
Congressman, and I think also the fact that we have included 
the safeguards agreement, the IAEA safeguards agreement, is one 
that takes our superior and one that knits together the 
international coalition that supports the IAEA and its efforts 
and makes sure that the highest standards of nonproliferation 
are met.
    Mr. Ackerman. I would like to work with you on that.
    Ms. Tauscher. My pleasure.
    Mr. Ackerman. My time has expired. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman. And Madam 
Secretary, congratulations.
    Ms. Tauscher. Thank you. Glad to be here.
    Mr. Fortenberry. Sometimes in hearings, we drill down 
deeply very quickly. I would like to go back to the top of the 
mountain. A civilian nuclear program can be a foundation for a 
nuclear weapons program. There are technological hurdles there, 
but it can set a foundation.
    Ms. Tauscher. Yes.
    Mr. Fortenberry. That may be a significant threat with our 
friends in the UAE in regards to this agreement, however if 
this agreement does serve as a template for future agreements 
as has been suggested, isn't it important that we really 
examine one safeguard--real-time surveillance? And has the 
administration pushed aggressively for this beyond the 
additional protocol that Iran has already rejected.
    Ms. Tauscher. As you know this agreement was negotiated by 
the Bush administration and inherited by the Obama 
administration.
    Mr. Fortenberry. But of course, you own it now.
    Ms. Tauscher. I own it now. But if you allow me to get 
better--get a better answer for you, exactly, I will tell you 
that when I was sitting on that side of the table, I was not a 
fan of side agreements. I believe side agreements are just what 
you think they are. They are just like kissing your sister. 
Nice, but it doesn't get you anywhere.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
  Question Asked During the Hearing by the Honorable Jeff Fortenberry
    The specific safeguards measures that the IAEA will apply at a 
specific site in the UAE will be determined under the procedures 
provided for in the UAE's NPT safeguards agreement. The IAEA has a wide 
array of safeguards measures at its disposal, including remotely 
monitored surveillance; it selects those which are applicable based on 
its technical analysis of the needs of each situation. The IAEA will 
require that the measures applied are effecting in carrying out its 
verification responsibilities. It is premature to determine whether use 
of a real time surveillance camera will be the most effective way of 
meeting safeguards needs at a future UAE facility.

    Mr. Fortenberry. I have not had that experience, but.
    Ms. Tauscher. So, this is an agreement that is agreed to. 
And what it needs now is for House and Senate action. So let me 
go back and understand exactly what the opportunities are and 
what the situation is. I cannot tell you where the UAE would 
be; I cannot tell you whether we would propose it.
    But at the same time let me endorse what you are saying. I 
think there is a lot of merit in what the IAEA has done in 
technology both in surveillance and monitoring. Their 
international monitoring system now is up and running and it is 
of significant value to us. I think what we need to do if you 
don't mind we will take this for the record and I will give you 
a call.
    Mr. Fortenberry. Thank you very much. I appreciate your 
willingness to work with us on that. It is a serious concern to 
me and to a lot of members and to you as well. I think it also 
sends the correct message to France and Japan and the Russians 
and the South Korea who may be in line waiting if this goes 
another way to sell things and that that it is a necessary 
component of safeguards that the international--the spirit of 
safeguards that the international community should readily 
embrace. And so there is a leverage point with the other 
countries who are interesting in this pursuing this business as 
well. Thank you very much.
    Ms. Tauscher. Congressman, I will get back to you before 
the end of the week.
    Mr. Fortenberry. Thank you.
    Mr. Ackerman. Mr. Woolsey.
    Ms. Woolsey. So let me put this picture together. Before we 
went on our break, you finally were sworn in. You were--you had 
a wedding, I hope you went on a trip. This is your first work 
and probably your first hearing.
    Ms. Tauscher. Yes.
    Ms. Woolsey. You are really good. Thank you. I cannot wait 
for us to all go--that you will we have to do.
    Ms. Tauscher. Thank you.
    Ms. Woolsey. Congratulations and you make me really proud.
    Ms. Tauscher. Thank you.
    Ms. Woolsey. This morning we have talked a lot about 
peaceful and safe use of nuclear power. Sadly, I don't believe 
there is such a thing. Right here in our own country, we are 
struggling to find a place to store spent nuclear materials. 
And here we are, we are a stable government and with the 
highest levels of security. We talk about proper safeguards 
with the IAEA and with this agreement and what good partners 
the UAE is. Well, partners split. Partners get divorced. And 
then what?
    So I worry that this is a bit of a slippery slope. Once we 
okay the use of nuclear materials, how do we guarantee the 
program won't change from a so-called civil use to military 
use? We have India as our example. They started out with a 
civil use system and then they moved to a military use system. 
We waived the rules for India. So I ask you, Madam Secretary, 
why won't we waive them here?
    Ms. Tauscher. Let me first say thank you very much for your 
comments. I enjoy our friendship and I look forward to working 
with you. And as somebody who has been married for 10 days, I 
am not ever going to advocate divorce.
    Ms. Woolsey. I was worried about bringing that in right 
there.
    Ms. Tauscher. You could say that this agreement has a very 
strong prenup in it. It is called article 13. Where we make a 
very, very strong case for the cessation of cooperation or 
termination of the agreement should there be any enrichment of 
uranium or reprocessing of nuclear fuel within the territory or 
any termination or abrogation or material violations with the 
IAEA agreements. You know, this is a very strong, tight 
agreement.
    And I think that we have history as our guide. And yes, we 
have had relationships in the past where people have not done 
what they promised and abrogated agreements and done things and 
have caused them to have sanctions and other things. I think 
that the UAE understands the balances and benefits of this 
agreement. I think that we have done the best we can to balance 
for ourselves the potential commercial activities with what is 
the most important piece of this, which is that there is 
virtually no opportunity for transfer, reprocessing or other 
things. And that there are lots of eyes on this. And that there 
is this agreement in abeyance that would be terminated 
immediately very visibly. And I think the UAE has voluntarily 
come into this agreement. I think we have made very clear our 
most important piece of this is the national security of the 
United States and the region and the world and that there will 
be no proliferation of any of the materials involved in this.
    Ms. Woolsey. Well, I hope you are right.
    I would like to change the subject. It is the same subject: 
Nukes. You know I have H. Res. 333 titled ``No Nukes'' so that 
following up on what President Obama called for a world free of 
nuclear weapons--and I have been working on this for years as 
you know--and my legislation calls on the President to live up 
to our nuclear treaty obligations and to move us toward a 
nuclear-free world.
    So as the world's leading superpower, what should we be 
doing to lead by example? Should we be reaching out? I am 
asking you that question, what should we be doing?
    Ms. Tauscher. Congresswoman, I appreciate your work, and I 
would say that President Obama in his Prague speech was 
channeling you in many ways. I think that in his Prague speech 
the President was very eloquent and very strong about his 
agenda for a world free of nuclear weapons in the future. But 
at the same time that the United States is not going to 
unilaterally disarm and that we are certainly going to maintain 
our weapons while other people have them.
    But at the same time, we have an opportunity with the 
climate change benefits and other countries competing for this 
business, if we can satisfy ourselves on significant issue of 
nonproliferation, if we can make sure that the IAEA safeguards 
are parts of these agreements and that we have strong 
agreements with good partners and that it is done on a case-by-
case basis that this is a good opportunity for the United 
States, especially when we have a partner like the UAE that is 
as close to us in a volatile region.
    So I think the President in his Prague speech, which I 
encourage everyone to read again, was eloquent about our 
position going forward, about our strong commitment to nuclear 
nonproliferation, and also about his plans. As you know, we had 
a very good agreement in Russia just this past weekend on a 
follow-on START agreement and a further reduction in our 
stockpiles. So I think this is a very busy area. I look forward 
to working with you on these issues and I appreciate your 
leadership.
    Mr. Ackerman. Thank you. The chair would use a quick 
prerogative to note that the instance we have a very strong 
prenuptial agreement was basically the cause for my suggestion 
because despite that, we are not in a monogamous relationship.
    Ms. Tauscher. You are good at this, much better than I am.
    Mr. Ackerman. Pay no attention to me. Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman. Madam Secretary, 
welcome. Madam Secretary, I am probably the only member of the 
committee who has probably a very different perception in terms 
of what we are discussing here. And I would like to take the 
lead of what Chairman Ackerman stated earlier, saying what are 
the broader implications of this 123 agreement. And I recall, I 
think it was Santayana who said, ``Those who do not remember 
the past are condemned to repeat it.''
    I say that my perspective comes from after the fact. After 
the fact, that it was in World War II that we exploded the 
first nuclear bomb, killed over 100,000 people just in a split 
second. It was after the fact that our country went through a 
tremendous debate whether or not the harnessing of the use of 
nuclear power was to be for scientific and peaceful purposes or 
for military purposes. The military won out. And to that extent 
we went to the Marshall Islands and conducted 67 nuclear 
detonations, exploding the first hydrogen bomb there on that 
island. Literally obliterated. Caused over 300 Marshallese 
people--to this day we have not made our commitment to those 
people medically. Take possession disposition of their lands 
and properties.
    That is my saying that after the fact, that we have five 
nuclear countries who are permanent members of the Security 
Council. Somewhat because of the provisions of the nuclear 
proliferation treaty they are the only ones who can still use 
and have in their possession nuclear weapons. And it raises the 
questions about why then Iran and North Korea are trying to 
develop nuclear weapons in the same way. So we are trying to 
prevent them through the nonproliferation treaty. We even had 
an international treaty ban on nuclear testing. Guess what? One 
of the permanent five nuclear members in 1995 said the hell 
with it and broke the moratorium.
    And so France goes out and says we will continue conducting 
nuclear testing in the South Pacific on the island of Moruroa, 
despite world opposition, despite the fact that it is a 
signatory to the ban on nuclear testing, they went ahead and 
did it.
    So I am really bothered by the fact that we are making all 
of these safety provisions--and by the way I do support the 
proposed agreement in principle.
    Ms. Tauscher. Thank you.
    Mr. Faleomavaega. But the realities of what I am trying to 
say here, Madam Secretary, how serious are we really in saying 
that nuclear weapons all together is something that we ought to 
get rid of it, and yet the five permanent members of the 
Security Council continue to have these weapons. Is there any 
wonder that India said hey, if China has it, why couldn't I? It 
is on my borders. And if India has it, Pakistan raises the 
issue, why couldn't I have nuclear weapons? So this madness 
continues.
    And I am very, very concerned. Where are we at some point 
in time saying are we really serious enough of getting rid of 
nuclear weapons, weapons of mass destruction all to together? 
That is my initial question. I just wanted to give you that 
philosophically, Madam Secretary.
    Ms. Tauscher. Congressman, the President's speech in Prague 
I will commend to you is an enormous undertaking by the 
President to state what I think had not really been stated 
before by a head of state. That the United States is not going 
to unilaterally disarm, that we are not going to remove our 
nuclear deterrent nor our protections for countries that we 
have offered safeguards to, but we are going to work toward the 
elimination of nuclear weapons. I think that the President's 
work this weekend in Russia with President Medvedev on the 
follow-on to the START agreement is another example of 
President Obama's leadership on this issue.
    Mr. Faleomavaega. Madam Secretary, my time is limited and I 
appreciate--I will definitely read the President's speech that 
he gave in Prague.
    I introduced a House Resolution 402, on a recent incident 
where the nuclear industry contracted two British ships from 
France to take a considerable amount of MOX, lethal nuclear 
waste from France, transshipment by ship to Japan. And I am 
told if this MOX, if you transform it into nuclear weapons are 
talking about taking 225 nuclear bombs by ship that was done 
recently. It apparently has the blessings of the nuclear 
community at the UAEA, the Nuclear Suppliers Group. My question 
is how safe are we really making sure that 1 in 1 million 
chances--we said that about Valdez, the oil spill. What are the 
chances that this continues now--I will wait for the second 
round.
    Ms. Tauscher. If I could answer that for the record, I will 
be happy to. I will answer it for the record.
    Mr. Ackerman. Would you like to answer it for the record?
    Ms. Tauscher. I will take it for the record.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
      Question Asked During the Hearing by the Honorable Eni F.H. 
                              Faleomavaega
    Sea shipment of mixed plutonium/uranium oxide (MOX) fuel is 
primarily undertaken between Europe and Japan, although other instances 
have occurred. The particular shipment mentioned in H. Res. 402 
involved plutonium subject to both the U.S.-Euratom and U.S.-Japan 
peaceful nuclear cooperation agreements. Both agreements allow for the 
return to Japan of plutonium recovered from reprocessing of U.S.-
obligated Japanese spent fuel in France and the United Kingdom. The US-
Japan agreement has specific provisions governing such shipments, in 
particular, provisions involving the safety and security of the 
shipments.
    The Administration considers these shipments to be both safe and 
secure. Sea transport of radioactive materials is routinely carried out 
with an exceptionally high degree of safety in compliance with 
stringent International Atomic Energy Agency (IAEA) and International 
Maritime Organization (IMO) standards. The carrier of the MOX fuel has 
completed more than 160 sea shipments of radioactive materials 
(including spent fuel as well as vitrified high level radioactive waste 
and MOX) between Japan and Europe over more than thirty years without a 
single incident involving serious radiological consequences. Moreover, 
the security plans for these MOX shipments, including the most recent 
one, have been specifically reviewed by the Executive Branch 
(Departments of Defense, Energy, and State), and have been determined 
by U.S. experts to be a sound basis for the Government of Japan to 
undertake its physical protection responsibilities in connection with 
such shipments.

    Mr. Ackerman. Mr. Inglis.
    Mr. Inglis. Thank you and congratulations, Madam Secretary.
    Ms. Tauscher. Thank you, Congressman.
    Mr. Inglis. I see advantages here to a nuclear partnership 
with the UAE. It is certainly wonderful when a country is 
willing to renounce claims to domestic enrichment and seek an 
agreement like this.
    The challenge that I see in a number of questions that I 
could ask, some of which may have been already asked, have to 
do with their effectiveness in controlling exports of that 
technology from the UAE. And of course, we have a brand-new 
export control law passed just in August 2007, not fully 
implemented, regulations haven't been promulgated.
    How can we be sure that the UAE is going to be diligent in 
protecting the export--preventing the export of this technology 
to other places in a region that has some folks that we are 
very concerned about that might get some of this technology. 
What is your response? Where do you think we stand with that?
    Ms. Tauscher. I think, Congressman, Article 13 of the 
agreement provides a very, very clear path for any kind of 
transfer or enrichment, abrogation of the agreement, any kind 
of material violations of the IAEA safeguards would cause 
complete and utter stoppage of the agreement. And the UAE has 
made it very clear that they are moving on their export control 
regime. They have moved not only to articulate the law from 
August 2007 and to promulgate it but they have already begun 
hiring prosecutors and doing ways to adjudicate, which is a 
very key piece of having a soup-to-nuts opportunity to deal 
with any kind of interdiction that they might have or any 
problems that they might have with transfers or making sure 
that the export control regime as strong as possible.
    We are confident that they are keeping up with their 
promises and their initiatives. But once again it will be our 
job to make sure that they follow through and it will be my job 
to make sure that I follow through with you to let you know 
that we remain confident that they are doing so.
    Mr. Inglis. How about existing acts like the Iran Sanctions 
Act of 1996, the Iran, North Korea and Syria Nonproliferation 
Act? Are we confident that they are in compliance and are a 
partner with us in those kinds of controls that we are seeking 
in those----
    Ms. Tauscher. Yes, Congressman as far as I know, they are. 
Yes.
    Mr. Inglis. Thank you, Mr. Chairman.
    Ms. Tauscher. Thank you, Congressman.
    Mr. Ackerman. Thank you. Ms. Lee.
    Ms. Lee. Madam Secretary, now I suspect and there seems to 
be little doubt that U.S.-UAE nuclear cooperation agreement 
will probably encourage other regional states to aggressively 
pursue civil nuclear power.
    Now with your business background, my business background, 
I am looking at it from a cost-benefit analysis, do the 
benefits first of all of really setting this high a standard 
for future peaceful nuclear power agreements as outlined in 
this proposed agreement, do these benefits outweigh the 
increased export control and proliferation concerns that we 
might have as a number of additional states with access to 
sensitive technologies and materials increases? So that's the 
first question.
    And the second question is just let me ask you about the 
human rights considerations that may or may not be factored in 
because we know that the UAE has had some issues with regard to 
human rights abuses. And has that been part of these 
negotiations and have we said anything in the context of this 
agreement? Thank you.
    Ms. Tauscher. Thank you. The first part of your question as 
far as the business opportunities, that is secondary to the 
agreement. The agreement once again is a framework that would 
allow companies, United States companies to bid for and to seek 
opportunities to build civil nuclear reactors in the UAE. But 
the most important part of the agreement is that this is a 
very, very strong nonproliferation agreement and we think it is 
superior to other countries's deg. agreements with 
other countries. We believe that this is an agreement that is 
important because it embeds the IAEA safeguards and makes very 
clear what would happen should there be any abrogation, any 
kind of transfer, any reprocessing, all the things that we 
don't want to have happen. And this is something that the UAE 
has volunteered to do. This is not something that we--we have 
the high bar but it is something that they have agreed to. And 
once again, these agreements going forward with potential other 
countries are going to be done on a case-by-case basis.
    And I will stress to you that the nonproliferation 
component of this is the most important piece of it. We always 
in the United States Government want to support the ability for 
United States business to have outreach around the world, but 
it is never going to take the front seat to national security.
    Ms. Lee. Let me just ask you though, and I understand what 
you are saying and I agree. But does this agreement encourage 
other regional states to be more aggressive in their pursuit of 
nuclear power?
    Ms. Tauscher. I don't think it does. But I think what it 
does do is set the standard for if there are ambitions to have 
civil nuclear power, it sets the standard for, I believe for 
how these agreements should be done. Whether other countries 
will agree to this high standard, I don't know in the future. 
But I certainly think that this is the tightest agreement that 
we could have gotten.
    When you asked about human rights, Congresswoman, I am 
going to have to get back to you for the record, if you don't 
mind. I don't know, since I was not party to the negotiations, 
it was negotiated during the Bush administration's time, I 
don't know what conversations there were. If there were any, I 
will certainly let you know.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
     Question Asked During the Hearing by the Honorable Barbara Lee
    The U.S. supports efforts by every country to strengthen respect 
for human rights and the rule of law. While not a subject of discussion 
during the negotiation of this agreement, our embassies and consulates 
regularly engage on human rights issues and report on allegations of 
human rights abuses in the annual Country Report on Human Rights 
Practices.

    Ms. Lee. Thank you very much. Congratulations.
    Ms. Tauscher. Thank you.
    Chairman Berman [presiding]. The gentleman from Illinois, 
Mr. Manzullo is recognized for 5 minutes.
    Mr. Manzullo. I think you are doing remarkably well for 
having been on the job for 3 days and having gotten married 
over the weekend.
    Ms. Tauscher. Thank you.
    Mr. Manzullo. Congratulations. A great choice for this 
position.
    Ms. Tauscher. Thank you.
    Mr. Manzullo. I have a simple question and perhaps you 
don't have the information right at hand, which we readily 
understand. On page 6 of your testimony, the last bullet point, 
it says the UAE is a key counterterrorism partner and actively 
works to combat money laundering, terrorist financing, et 
cetera.
    Can you delineate for me what legislative and functional 
actions the UAE has taken to target the logistical and 
financial networks that support terrorist organizations and how 
effective have they been?
    Ms. Tauscher. Well, in August 2007 the UAE promulgated its 
own export control regime which they have now significantly 
beefed up, including prosecution and adjudication. This was 
something that impressed us because of the significant 
transshipment portage that the UAE is. This is something that 
is important for us because not only of our technology 
advantages but obviously because of the nonproliferation issues 
that we have been concerned about in the past and the 
relationship between the UAE and Iran. So I think, Congressman, 
that is the best example I can give you. If you don't mind for 
the record, I am happy to supply others if we have them.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
 Question Asked During the Hearing by the Honorable Donald A. Manzullo
    The UAEG is a partner in our efforts against terrorism and has 
taken important legislative steps to establish a stronger regulatory 
environment for the financial sector. These include passage of an Anti-
Money Laundering Law in 2002 with the subsequent creation of a 
Financial Intelligence Unit (FIU) and passage of an Anti-Terrorism Law 
in 2004. The UAE was the first Arab country to join the Egmont Group in 
2002, and participates in the Middle East North Africa (MENA) Financial 
Action Task Force (FATF) and the mutual evaluation process. In 
addition, the UAE Central Bank provides training programs to financial 
institutions on combating money laundering and terror financing. 
Finally, the UAE has taken action to freeze terrorist funds pursuant to 
the regime set up by United Nations Security Council resolution 1267, 
and in response to U.S. requests.
    Despite these significant efforts, challenges remain. For example, 
the 2008 MENA-FATF Mutual Evaluation Report for the UAE made a 
recommendation to amend the federal anti-money laundering law and 
increase resources available to the Central Bank's FIU. The UAE has 
taken important steps to address hawala remittances, but further 
vigilance is required. Although the UAE enacted regulation against bulk 
cash smuggling in 2002, we have encouraged them to implement additional 
measures to combat bulk cash smuggling. This is a critical issue as the 
UAE is one of the most significant financial and trading centers in the 
Middle East with a high degree of cash intensive transactions. We look 
forward to continued close cooperation with UAE officials to address 
these important issues and to advance our mutual interest in combating 
terror finance.

    Mr. Manzullo. I would appreciate that. It would be both as 
to legislative actions and functional actions. If you could 
respond.
    Ms. Tauscher. The most recent is the 2007 export control.
    Mr. Manzullo. If there is anything else, would you respond? 
And you can take more than 3 days to send the letter.
    Ms. Tauscher. I may call you.
    Mr. Manzullo. Thank you. I yield back.
    Chairman Berman. The gentleman from Georgia, Mr. Scott, is 
recognized for 5 minutes.
    Mr. Scott. Thank you very much. And welcome.
    Ms. Tauscher. Thank you.
    Mr. Scott. It is such a pleasure to see you sitting there 
on that side and congratulations to you.
    Ms. Tauscher. Thank you. Thank you very much.
    Mr. Scott. I really don't know where to begin, but let me 
begin with this. We just returned from Russia last week, and 
there have been discussions on nonproliferation with the 
Russians. And in terms of moving forward, there is a thin line 
here. And it is sort of a balancing act it seems to me that we 
have to take as we move forward to nonproliferation.
    And that is in some measures having nuclear weapons can be 
interpreted as having been a major deterrent in terms of 
maintaining peace in the world and among the nations.
    But as we move forward in all of these countries now 
wanting to get nuclear capacity, could it not be that if the 
UAE moves forward, and I am inclined to agree to go along with 
it because if I believe we don't do it, somebody else will and 
we would lose control. I also believe that we also could lose 
some extraordinary solid business opportunities.
    But I think down the road, Madam Secretary, what we are all 
going to be faced with is how do we balance this? How do we 
balance this rush for nuclear energy in many of these 
countries, particularly in the countries, and how do we know 
whether or not this rush for nuclear energy for civilian 
purposes is not also a way to begin to get into the process of 
getting nuclear weapons?
    Because you look everywhere down the line, Iran says we are 
not getting a nuclear weapon here. We are just trying to get 
this for civilian purposes. And if the UAE moves down that 
road, then maybe others will say, well, this is the way you do 
it. You don't say what you really want, you say I want these 
for nuclear energy but we are moving to try to get a 
counterbalance. How do we deal with that?
    Ms. Tauscher. Thank you Congressman for that very 
thoughtful question, and I think that is as Congressman 
Ackerman and Chairman Berman have said and Ms. Ros-Lehtinen has 
said this is a balancing act and clearly you have identified 
the two very key components. One is national security and our 
strong desire for no proliferation of weapons of mass 
destruction at all, but certainly not in a very volatile region 
like the Middle East. And with the reality of the fact that 
there are very aggressive partners out there from other 
countries that are willing to make deals. And what the United 
States did--and by the way it was the previous administration--
they made what we could do was make the strongest agreement 
possible.
    And I think that the UAE's agreement to the IAEA safeguards 
and the whole idea of Article 13 being as strong as it is and 
unambiguous as to the consequences of any kind of transfer, 
abrogation, as being a cessation of the agreement and other 
things happening is what the IAEA has volunteered to do.
    And I think you are right. It does take a very strong sense 
of purpose to make sure that you understand what you is 
important obviously be national security and nonproliferation 
is the most important piece of it. But I think what we have 
done is we have got now an agreement that is one that we think 
is the best agreement that we can get and one that will protect 
us when it comes to nonproliferation, also give the United 
States businesses a chance to compete for business in the UAE. 
Work with a very strong partner that we want to stay close to. 
And make sure that we are diligent in making sure that we are 
monitoring this situation. Having a big IAEA role is a very 
strong component of this. But there are also future 
opportunities, closed end fuel cycles, nuclear fuel banking, 
many things that President Obama and Secretary Clinton and 
others have talked about are components of this. Because if you 
can really make sure that countries that have access, sovereign 
countries that make their own decisions to civilian nuclear 
power but that they are completely closed off from the 
opportunity of reprocessing or transferring that would make 
everybody a lot more secure.
    Mr. Scott. Let me ask you this on Iran. The UAE has 
conducted a significant amount of bilateral trade. But have we 
asked the UAE or did they offer to decrease their trade 
activities with Iran, particularly with respect to refined 
petroleum products?
    Ms. Tauscher. The agreement was negotiated with the Bush 
administration. I don't have any idea if that was part of the 
agreement.
    [The information referred to follows:]
   Written Response Received from the Honorable Ellen O. Tauscher to 
     Question Asked During the Hearing by the Honorable David Scott
    The UAE has told us that it fully supports and enforces United 
Nations Security Council resolutions that prevent the transshipment of 
sensitive materials and technologies to Iran. We have made our view 
that states should not engage in business as usual with Iran well known 
to our allies and international partners.

    Chairman Berman. I am just going to parenthetically 
interject here. I know that we have some votes now and we have 
got to wind it up. But the issue Mr. Scott raises is the issue 
that a number of members have raised regarding other countries. 
Much of this can be dealt with if the administration leads the 
way in the Nuclear Suppliers Group to take this excellent 
agreement and make it the standard for all the nuclear 
technology suppliers to incorporate in their export policies.
    So I do urge step two after the negotiation of this 
agreement is to make this the gold standard, the real standard 
for all future----
    Ms. Ros-Lehtinen. Mr. Chairman, if I may? May I? I realize 
that the member's time has extend ended and then you sort of 
take up that baton. That doesn't seem fair.
    Chairman Berman. I take your point.
    Ms. Ros-Lehtinen. Thank you.
    Chairman Berman. Ms. Sheila Jackson Lee.
    Ms. Jackson Lee. Secretary, I love saying that, double 
congratulations to you. And we look forward to working with 
you. Let me try to say that we have many friends in the UAE, 
meaning the United States, the cross-pollenization of business, 
trade, and certainly our engagement has been a positive one, I 
believe.
    And so I pose this question that may have been asked, I 
just want to hear how you frame it or how you perceive it, and 
that is, of course, the relationship with Iran and the 
suggestion that there have been some support for terrorist 
activities, in particular Hezbollah.
    And the second question is would you give a layman's 
explanation--when you think of civil nuclear use, there is 
certainly medical use but you think of energy. When you think 
of the UAE, you think of the region that it is in and you think 
that even though we support green, we know it seems to be in a 
region where it can be self-sufficient. What is the pressing 
need for this agreement, if you will? And then the question 
regarding its relationship with Iran?
    Ms. Tauscher. Congresswoman, sovereign nations will make 
their own decisions, as you know, as to how they are going to 
balance green power and give themselves other opportunities to 
provide hopefully low cost energy to their populations. So the 
UAE's agreement with the United States is one that they entered 
into voluntarily to acquire the ability to negotiate in the 
future with American companies to have them bid for and build 
civilian nuclear power plants.
    This is a region that has obviously a lot of petrochemicals 
but also a lot of wealth and a lot of poverty. So whatever 
choices the UAE has made and other countries make, are their 
own to make. But there is a lot of competition in these 
countries from our competitors around the world.
    Ms. Jackson Lee. The nuclear business?
    Ms. Tauscher. The nuclear business. It is a very, very, 
very competitive area. We have a very close relationship with 
the UAE. Over time, the UAE has significantly improved its work 
in interdicting transshipments of materials and other things 
that are worrisome to us on a whole host of weapons of mass 
destruction----
    Ms. Jackson Lee. You view them as having been a good friend 
or a consistent partner?
    Ms. Tauscher. They are a very, very good friend. They are a 
very good trading partner. They were a very close military 
partner to us for the region and they are obviously a country 
where we have many, many relationships and where we want to 
maintain a very strong relationship.
    Having said that, we are not going to enter into a bad 
nuclear agreement with anybody, even a good friend. So that is 
why we hold this agreement up as a superior agreement because 
it has gone farther than many other agreements have, and 
certainly our competitor's agreements, we believe in that it 
includes Article 13, which is a deal breaker for the agreement 
if there is any kind of transfer or abrogation or any breaking 
of the safeguards.
    Ms. Jackson Lee. And are you concerned about past history?
    Ms. Tauscher. I think that there are always lessons in 
history. But I think that our friends in the UAE have done a 
lot to demonstrate that they are aware of those issues. And 
that they are working closely with us, and with the community 
generally, the international community generally. And they have 
a very strong relationship with Iran. They are a very strong 
transshipment and trading partner with Iran.
    Ms. Jackson Lee. And you have no conflictedness with 
changing governments or changing attitudes with the United 
States, even though we have this agreement, and transfer going 
into Iran which is a very troubling state?
    Ms. Tauscher. I think everyone is aware of what would 
happen if this agreement is abrogated or broken in any way.
    Ms. Jackson Lee. And finally, you feel that the monitoring 
process and, in fact, Article 7 that binds the UAE not to 
conduct enrichment or reprocessing, you feel that the State 
Department is able to monitor that sufficiently? Article 7?
    Ms. Tauscher. I think that the United States Government and 
the IAEA combined, yes, I think that we are sufficiently able 
to do that.
    Ms. Jackson Lee. I yield back. Thank you.
    Chairman Berman. We have 2 minutes and 20 seconds to vote. 
I will ask unanimous consent that Mr. Connolly's statement be 
included in the record. And to the extent he had some questions 
that you answer them for the record.
    Ms. Tauscher. I am happy to answer them.
    Chairman Berman. Thank you very much for coming. Did you 
want to say----
    Mr. Connolly. I just want to welcome back my friend and our 
colleague, Under Secretary Tauscher. We are in good hands 
having her at the State Department. Thank you, Mr. Chairman.
    Chairman Berman. Thank you.
    Ms. Tauscher. Thank you. Mr. Chairman.
    Chairman Berman. Thank you.
    [Whereupon, at 11:58 a.m., the committee was adjourned.]
                                     

                                     













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